Daily Morning Note – 10 May 2022
Singapore stocks fell in early trade on Monday (May 9), tracking losses in the global and regional markets amid growing concerns of slowing economic growth. Singapore’s Straits Times Index (STI) headed down 0.2 per cent or 7.34 points to 3,284.55 as at 9.02 am. Losers outnumbered gainers 88 to 43, after 55.8 million securities worth S$52.9 million changed hands. One of the most active counter by volume was Jiutian Chemical, which rose 3.1 per cent or S$0.003 to S$0.101, with 13.6 million shares changing hands. Other heavily traded securities included Sembcorp Marine which fell 1 per cent or S$0.001 to S$0.095 with 3.9 million shares traded, as well as Yangzijiang Shipbuilding which stayed flat at S$0.89 with 3.5 million shares traded.
Wall Street’s major indexes opened lower on Monday (May 9) as rising US Treasury yields amid prospects of aggressive monetary policy tightening weighed on growth stocks, with the sentiment taking a hit from fears of an economic slowdown in China. The Dow Jones Industrial Average fell 214.2 points, or 0.65 per cent, at the open to 32685.17. The S&P 500 fell 42.1 points, or 1.02 per cent, at the open to 4081.27, while the Nasdaq Composite dropped 221.6 points, or 1.82 per cent, to 11923.029 at the opening bell.
SG
The wholly-owned subsidiaries of Keppel Offshore & Marine (Keppel O&M) have inked agreements for the utilisation of 2 jackup rigs to be deployed in Saudi Arabia. These bareboat contracts are expected to generate about S$135 million in revenue for Keppel O&M, including modification works to prepare them for deployment, said Keppel Corp in a press statement on Monday (May 9) evening. ADES Saudi Limited Company will charter the 2 rigs for 5 years, starting in Q4 2022. Keppel O&M chief executive Chris Ong noted improving conditions in the oil and gas market, and said these charters “attest to the good demand for Keppel O&M’s proven state-of-the-art KFELS B Class rig in markets such as the Middle East”. He added that the company continues to see strong demand for its rigs, and is actively pursuing more charters and sales opportunities.
Singapore-listed real estate investments trusts (S-Reits) have held up admirably despite market volatility in the face of rising interest rates, lingering Covid-19 concerns and a protracted Russia-Ukraine conflict with no resolution in sight. They look likely to remain a “safe haven”, on the back of Singapore’s reopening story. The FTSE ST Real Estate Investment Trusts Index (FSTREI) in April dipped 0.8 per cent month on month, compared with a 1.5 per cent decline in the benchmark Straits Times Index (STI). The outperformance was led by a 7.5 per cent month-on-month gain among hospitality Reits during the month. Hospitality Reits had also surged by 14.4 per cent month on month in March, after Singapore announced the lifting of most Covid-related restrictions.
CSE Global secured S$232.3 million worth of new orders in the fourth quarter ended Dec 31 2022, up 118.8 per cent from a year ago. This takes its order book to S$344 million as at Q1 2022. About S$105.5 million of the new orders were landed by the group’s energy sector, which was higher than the S$56.6 million secured by the sector in Q1 2021, on the back of a major contract relating to the maintenance and refurbishment of building management control systems for an offshore facility and higher orders for integrated systems. New orders for its infrastructure sector surged by 187.8 per cent year-on-year to S$110.1 million, thanks to a major contract secured to provide engineering solutions for the data-centre market and higher field services orders for the wastewater market in the Americas region. Stronger orders of radio communication equipment and solutions led by utility and renewables customers in Australia was also a contributing factor. The rest of the new orders came from its mining & minerals sector, which was worth S$16.7 million.
US office-focused Manulife US Real Estate Investment Trust (Manulife US Reit) on Monday (May 9) said that portfolio occupancy for the first quarter ended Mar 31 dipped to 91.7 per cent, down 0.6 percentage point from 92.3 per cent as at end-2021. The manager noted that occupancy remained above the US Class A average of 83 per cent. At a briefing accompanying the operational update, the Reit manager said the decline in occupancy was largely due to 2 tenants at its Peachtree and 10 Exchange Place properties that vacated over 20,000 square feet (sq ft). This was partially mitigated by improvement in occupancy at the Reit’s Michelson property, which increased to around 90 per cent as at end-March, from about 80 per cent in June last year.
US
Gold prices edged down on Monday (May 9) as elevated US Treasury yields and a firm dollar pressured demand for greenback-priced bullion. Spot gold fell 0.1 per cent to US$1,880.56 per ounce, as of 12.49 am GMT, while US gold futures were down 0.2 per cent to US$1,879.30. Benchmark 10-year US Treasury yields hit their highest since November 2018, pressuring prices of zero-yield gold. The dollar hovered close to a 20-year high against its rivals, making greenback-priced bullion less attractive for other currency holders.
Oil prices sank about 6 per cent on Monday alongside equities, as continued coronavirus lockdowns in China, the top oil importer, fed worries about the demand outlook. Brent crude fell US$6.45, or 5.7 per cent, to settle at US$105.94 a barrel. US West Texas Intermediate crude fell US$6.68, or 6.1 per cent, to settle at US$103.09 a barrel. Both contracts have gained about 35 per cent so far this year. Global financial markets have been spooked by concerns over interest rate hikes and recession worries as tighter and wider Covid-19 lockdowns in China led to slower export growth in the world’s No. 2 economy in April.
Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, CNBC, PSR
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Date: 9 May 2022
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